You may be able to deduct part or all of each loss caused by theft, vandalism, fire, storm, or similar causes; car, boat, and other accidents; and corrosive drywall. You may also be able to deduct money you had in a financial institution but lost because of the insolvency or bankruptcy of the institution.
You can deduct personal casualty or theft losses only to the extent that:
The loss must be reduced by any salvage value and by any insurance or other reimbursement you receive or expect to receive.
IRS Form 4684 Casualties and Thefts is used to figure the amount of your loss to enter on Schedule A, line 20. To review or modify the Form 4684 entries in your TaxAct® return:
TaxAct will use the higher of your itemized deductions or the standard deduction for your filing status to maximize your tax benefit. If you do not itemize deductions, you cannot deduct casualty and theft losses and Form 4684 will not print with your return. However, you can separately print the form to review the calculations.
See the IRS Instructions for Form 4684 for additional information. For certain exceptions and lists of deductible and nondeductible losses, see IRS Publication 547.